Treasury bonds not traded on DSE for years

Some 221 listed treasury bonds exist only in name and have been languishing in the premier bourse year after year as the central bank deals with the financial instruments, officials said.
Officials at Dhaka Stock Exchange (DSE) said investors prefer to purchase treasury bonds from banks and other places because of some complexities in the secondary market.
Presently, there is no data regarding treasury bonds with Central Depository Bangladesh (CDBL), although these bonds are listed with the stock exchange.
The officials said now there is no scope of trading for treasury bonds in stock exchange as the Bangladesh Bank (BB) replaced data of bonds from CDBL to their own office.
In late 2011, the central bank introduced the Market Infrastructure (MI) Module to execute the online trading of Treasury Bill and Bond.
"Depository facilities are available in newly introduced MI Module, which will preserve the data of Treasury Bill and Bond. Information of Treasury Bonds preserved in CDBL will not be applicable after the introduction of BB's MI Module," reads a circular issued by the central bank on September 26, 2011.
A senior DSE official said treasury bonds are being traded through primary dealers of the central bank.
"We had earlier made some suggestions to BB and the securities regulator to facilitate the transactions of listed treasury bonds in the secondary market. But the BB and the securities regulator are yet to respond to our proposals," the DSE official said.
He said the listed bonds should either be allowed to be traded or de-listed from the exchange.
The market capitalisation of treasury bonds listed with stock exchange is around Tk 549.38 billion, making up 16 per cent of the capitalisation.
The officials of the premier bourse said it is easier for the investors to purchase treasury bonds from banks and post offices as they are not required to pay tax and transaction fee in such places.
DSE managing director Dr. Swapan Kumar Bala said investors must have retail brokerage accounts to purchase treasury bonds, which are listed with the stock exchanges.
"Secondly, transaction fee and tax are applicable to treasury bonds listed with the capital market. So, one can buy and sell bonds in other places without fulfilling the requirements," Dr Bala said.
The existing trading software of the stock exchanges is not able to calculate the yield to maturity of bonds.
The new automated trading system, which will go live in December 11 next, will include the feature of calculating the yield to maturity, the DSE official said.
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